Stock Analysis

These Analysts Think Marathon Digital Holdings, Inc.'s (NASDAQ:MARA) Sales Are Under Threat

  •  Updated
NasdaqCM:MARA
Source: Shutterstock

Market forces rained on the parade of Marathon Digital Holdings, Inc. (NASDAQ:MARA) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Marathon Digital Holdings' seven analysts is for revenues of US$284m in 2022 which - if met - would reflect a sizeable 47% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$318m of revenue in 2022. The consensus view seems to have become more pessimistic on Marathon Digital Holdings, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Marathon Digital Holdings

earnings-and-revenue-growth
NasdaqCM:MARA Earnings and Revenue Growth July 7th 2022

Notably, the analysts have cut their price target 30% to US$19.13, suggesting concerns around Marathon Digital Holdings' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Marathon Digital Holdings at US$35.00 per share, while the most bearish prices it at US$7.00. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Marathon Digital Holdings' past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 67% growth on an annualised basis. That is in line with its 81% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 14% per year. So although Marathon Digital Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Marathon Digital Holdings this year. They're also forecasting more rapid revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Marathon Digital Holdings' future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Marathon Digital Holdings after today.

Need some more information? At least one of Marathon Digital Holdings' seven analysts has provided estimates out to 2024, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

What are the risks and opportunities for Marathon Digital Holdings?

Marathon Digital Holdings, Inc. operates as a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets in United States.

View Full Analysis

Rewards

  • Earnings are forecast to grow 98.97% per year

Risks

  • Highly volatile share price over the past 3 months

  • Shareholders have been diluted in the past year

  • Has less than 1 year of cash runway

View all Risks and Rewards

Share Price

Market Cap

1Y Return

View Company Report

Further research on
Marathon Digital Holdings

ValuationFinancial HealthInsider TradingManagement Team